Jindal and “Populist-Tinged Reform”

Jindal’s published remarks this week saying that the GOP needs to take on big financial interests indicates that he is thinking more deeply than Daniel suggests. He had better be.

It was encouraging to see Jindal’s statement earlier this week that the GOP must not be “the party of big business, big banks, big Wall Street bailouts, big corporate loopholes, big anything.” The party’s record of being exactly that was an important factor in losing the election, and Romney was the personification of the GOP as the party of big business. As Michael notes, the remarkable thing is that the GOP isn’t doing worse than it is considering how irrelevant its economic agenda is to most Americans. It remains to be seen how serious Jindal is about his “populist-tinged reform.” Railing against big banks and bailouts is all very well, but it will take a lot more than that to change the way the party is perceived. If this doesn’t translate into specific policy proposals (e.g., breaking up the largest banks), it will never go beyond the standard pseudo-populism that pays lip service to the importance of small firms while continuing to undermine them and aid their larger competitors in practice.

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10 Responses to Jindal and “Populist-Tinged Reform”

One of the aspects of how worse or how much the Republicans could have done is who they were running against this time around. Obama’s reelection wasn’t something that some grand coalition necessarily wanted to see, but rather for many potential voters he represented yet another “not Romney”. I have to wonder what the election outcome might have looked like is Romney and his message were matched up against a different Democrat. There is really no way to control for that, but if the Republicans assume that – we just had the wrong candidate and if we had a better messenger, those extra 4 million votes would have been there for us – then they may be in for a very unpleasant surprise come 2016 when Obama isn’t on the ballot.

Additionally, it is nice that Jindal wants to talk about not being for big business, et al, but it will be necessary for the GOP to actually pursue policies (and they have a real chance to do so over the next two years, as they still control the House) that are not pro big business, et al. They should focus on immigration reform that restricts immigration, attempts to limit illegality (enforcement of existing laws), couple with with real middle and working class oriented economic populism, and they will have a much better chance of winning a larger share of the working and middle class vote, and may even begin to appeal to the black vote in some areas. Especially in places like Ohio and PS, just moving from 4% to 10-15% of the black vote could make a difference.

Yet, I think it is more likely they will cave on amnesty and lose the House and Presidency in 2016. Mostly, because they are not a very smart party. As Haley Barber has suggested, “the GOP needs a proctology exam”, obviously in an effort to find its head.

I’m just curious, is popular opinion still quite strongly anti-bailout, like it was during the 2008 crisis? The automaker bailouts are now widely seen as a success and a major feather in Obama’s cap. And given how the stock market has rallied back since all the bank bailouts were implemented, it seems like a lot of people are now convinced that those worked just fine as well. To say nothing of the “banks-paid-the-bailout-back” canard which, though inaccurate, seems to have taken widespread hold. In particular, I was struck by how Neil Barofsky was constantly peppered with these arguments — the bailouts worked, the government made money from them — while on tour for his book.

Of course, popular opinion may swing back against bailouts even more harshly if another banking crisis rears its ugly head and shows the bailouts to have been a fraud, which I think eventually will happen. But my worry is that anti-bailout politics will largely be a non-starter until it does, especially for a party as burdened by corporatist baggage as today’s GOP.

The GOP’s vocal defense of Wall Street and big corporations makes no sense. They let the Dems demagogue the issue while enacting policies that favor those interests. It was the Dems who primarily enacted TARP but put no restrictions on Wall Street as a condition of being bailed out. The Dems may have passed Dodd Frank but have not convicted a single person in connection with the financial crisis. Even after the Senate Committee investigating the financial crisis found rampant fraud. And watch the Dems leave for Citi and Goldman to rake in $25 million after the new year.

Bush 41 convicted 3500 bankers after the S&L and Bush 43 had hundreds of convictions stemming from the massive frauds of the late 1990s and early 2000s (Enron, Worldcom, Tyco, Adelphia, etc.). Why didn’t the GOP hang Corzine around Obama’s neck throughout the upper Midwest? Raise $10 million for Obama and steal $1.5 billion from your customers. That would have gained some traction with the farmers in the Midwest.

The same with free trade. The GOP loudly proclaims the blessings of free trade throughout the rust belt and loses votes and elections. The Dems enact free trade but give minor lip service to “fair trade” and win elections.

Breaking up the banks is something we hear a lot about. It’s worth remembering that the GOP base was presented with a candidate who wanted to do exactly that in the form of Jon Huntsman, and he was soundly rejected. Huntsman certainly had his flaws (taking a position with the Obama administration probably being foremost among them in the eyes of the base), but given the weak field, one might have hoped for at least a little better than his single digit showing.

But if you really want economic populism, how about a party that advocates taxing income from capital gains or dividends (or pensions or government benefits) at the same rate as income from actual work? That has the virtue of simplifying the tax code, much in vogue these days, and being a reform that working people can both easily understand and would likely overwhelmingly support.

Huntsman did propose some decent ideas in that area, but the number of people aware of this part of his agenda was very small. He chose to identify himself as another McCain with his disdain for rank-and-file conservatives and preferred to emphasize his support for the Ryan budget and his willingness to attack Iran. Huntsman was rejected in part because he made a point of rejecting a large part of the Republican electorate, and in part because he accepted the job in Beijing. Fair or not, that was bound to sink him, and it did.

Simplification of the tax code along the lines you describe makes sense, and it would be something else to include on the agenda.

I’m not so sure that breaking up the big banks will do all that much to reduce systemic risk, and by extension the likelihood of needing more bailouts down the road. It helps reduce the outsized compensation for bank execs, which tend to be paid according to the size of the holding companies they manage. And I could see it reducing their political pull and influence a little.

It would be a helpful step, but the problem with the big banks is not that they are big per se, but that they are big and highly leveraged and crowded into the same trades, exposed to large losses due to their trading operations and possible crunches in short-term funding for their long-term loan portfolios. So if JPMorgan gets split into 4 different companies, they’re likely to all come a cropper in the same way and at the same time, which will present roughly the same risk to the financial system as if today’s behemoth version was in trouble. Wouldn’t the feds still just panic and bail them all out again?

@Mike CLT “The GOP is indeed the stupid party. In policy and politics.”

This can’t be wholly true, because the GOP is only half of a political party. The other half is Democrat. Democrats and Republicans alike vote for for massive expansion of the welfare state, massive expansion of executive power, massive military buildups, bank bailouts, doing nothing to halt mass immigration, job outsourcing, and both favor propping up corrupt client states like Pakistan and Israel.

The only real difference I can see is that on the kind of radical social changes that make people’s gorges rise, the Democrats are ready to force them on us now, while the Republicans are willing to wait a few years and then sit by looking helpless while they are imposed by judicial fiat.

They couldn’t prosecute the bankers without also prosecuting the likes of Barney Frank and Chuck Schumer. That’s what made possible the morbidly fascinating spectacle of Frank writing rules purporting to reform the system that he did so much to corrupt.

It’s pretty well accepted that the current GOP consists of the “three-legged stool” coalition of big-business corporatists, big-military neocons, and the religious right. If you look at Jindal’s comments in light of who he is and what he stands for, you quickly realize that all he is proposing is to ditch two of those legs and leave only the religious right, of which he is one of the most committed members. Make him a national candidate, and you’ll never see another Republican elected outside the Bible belt.